SEC to Ban Short Selling...Not Just 'Naked' Shorts...This is BAD

[masmdu]

If this is done it will precipitate a CRASH!

http://www.marketwatch.com/news/story/sec-temporarily-ban-short-selling-report/story.aspx?guid=%7BFF4C26A3%2D14EA%2D4585%2DB8AE%2DF993A5EBC9A1%7D

WASHINGTON (MarketWatch) -- The U.S. Securities and Exchange Commission intends to temporarily ban short-selling, The Wall Street Journal reported Thursday night. It's unclear if the commission has approved the move, the Journal reported. SEC Chairman Christopher Cox, Federal Reserve Chairman Ben Bernanke and Treasury Secretary Henry Paulson were briefing congressional leaders Thursday night. The U.S. move would follow a similar action by U.K. regulators on Thursday

[still_one]

1. You are absolutely right. Are they going to ban puts also? It only proves

they do not understand what they are doing

[masmdu]

4. I think it would Kill PUTs as well

The option market makers have to hedge their option positions with the underlying stock. If they can't short the stock, you ain't gonna be buying no put options. That market will totally die with the "no shorts" decree.

[nadinbrzezinski]

25. Not that, think of what was NOT done during the depression

bernacke taught for years on it and is an expert, he is doing exactly 180 of what they did, or didn't do back then

[On the Road]

2. Wow -- That is Absolutely Astounding

Wonder what will happen to those QIDs I just bought?

[masmdu]

6. I guess you'll know soon enough...they are suppose to annouce before mkt tomorrow

[LeftyFingerPop]

7. Off topic: Great sig pic. n/t

[HereSince1628]

3. How does that work? Are american stocks and bonds only sold in US markets?

[LeftyFingerPop]

5. I agree this is not good at all for the long term, but...

don't you think it is a good move for the short term until the panic subsides? Aggressive shorts can short a stock down to zero during a panic, when it may not have anything to do with the real fundamentals of the company.

I would be very interested to hear your opinion on this.

[masmdu]

8. It will not stop panic it will accellerate it...

Panic will occur b/c the floor will be eliminated from the market.

When somebody goes short they are guaranteed buyers at a time when regular buyers are not going to have the nerve to do so. It's Crazy!

If they do it...Crash as shorts will cover and a vacuum emerges under price.

[LeftyFingerPop]

10. Gotcha. As the shorts cover, the price should spike temporarily...

and then there is a real potential for the bottom to drop out. How long do you expect the short covering process to take?

BTW: I have always viewed shorts as necessary to having an orderly market.

[masmdu]

14. I don't know but I would guess very quickly....

[LeftyFingerPop]

15. So, sell into the spike if you are long?

[masmdu]

17. Sorry, I simply wont make comments that could be considered 'advice'

Good luck to you.

[LeftyFingerPop]

19. I understand, and good luck to you...Here's my plan, and this is...

not in anyway to be construed as advice. I was 100% stocks before today. I sold 15% of my positions today. When I see a spike, I'm grabbing it and getting the hell out completely except for a small position in gold stocks.

[masmdu]

9. What SCARES me is that if they do this then there must be something BIG and NEGATIVE they know abou

t. They wouldn't do something like this that will cause such damage UNLESS it was seen as less bad than what they see coming.

(Or else COX is an idiot...in which case this will be headed off at the pass)

[wtmusic]

11. I can't believe they would be so stupid.

There must be very strict stops in place.

What about the people who already have short positions? :shrug:

[LeftyFingerPop]

13. I doubt that you can be forced by regulation to unwind a short position...

anymore than you can be forced to unwind a long position.

That being said, if I were short, I would sit tight, because as the OP said, this can't be good and existing shorts are going to be the winners here.

[natrat]

22. that's the crux of it right there

the cronies all get short,ban any other shorts, blow up some country , decimate the market and they make a bundle---these people are rotten to the core

[ebayfool]

21. Cramer thinks "financial terrorism" ...

http://www.cnbc.com/id/26778065

snip/
The damage being done to stocks through short selling, where Wall Street’s most legendary institutions are losing value at alarming rates, could be the work of financial terrorism.

Cramer’s been talking to the short sellers he knows, and that’s the theory they’ve been putting forward. His sources said that it’s doubtful that the market’s traditional short sellers are behind the negative action we’ve seen lately. So there is the possibility that someone else has been trying to wreak havoc in the markets rather than just profit from the problems of Goldman Sachs , Morgan Stanley and others.

Cramer, who was merely relaying what he heard, did say that, given the fact that the U.S. is in a “financial nationally emergency,” the “financial terrorism thing, to me, has to be put on the table just because the regular short sellers are not doing this.”

The Mad Money host urged the U.K.’s Financial Services Authority, which just banned short selling in financial stocks and now requires stricter disclosure from short sellers, to find out who’s on the other side of these trades.



Caught my eye cruising the financial sites, though I know zip @ most of what I'm reading.

[FVZA_Colonel]

23. It seems like that's something the administration would take up to claim Al-Qaeda is responsible for

this crisis. And personally, I'd like to know how the fuck our intelligence agencies could have missed an international terrorist group acruing enough funds to do something like this, if it is possible.

[MadrasT]

12. I really wish I wouldn't have clicked on this thread.

This falls into the category of "Things I'd rather not know about."

Train wreck, Track 1...

[masmdu]

16. Hey remember...Its not approved yet.

[LeftyFingerPop]

18. Holy shit! Isn't tomorrow options expiration?

The market is going to be a goat rope tomorrow! :rofl:

[Renew Deal]

24. Think about this...

There was no deal on the "RTC" today. The market went up on speculation. The statement that came from the congresscritters and Bernanke was non-committal.

[adamuu]

20. scary stuff n/t

[nadinbrzezinski]

26. The brits did this earlier today

that is what they are following